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US faces ‘narrowing path’ to avoid recession: IMF; growth forecasts dashed

Amid recession fears in the United States, IMF Managing Director Kristalina Georgieva said the country faced “a narrowing of the path to avoid a recession”.

“The economy continues to recover from the pandemic and significant shocks are rocking the economy from the Russian invasion of Ukraine and lockdowns in China,” the IMF Managing Director said, adding: “New negative shocks would inevitably make the situation more difficult”.

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The IMF also cut US growth forecasts to 2.9% for 2022 and 1.7% in 2023. The US is battling the highest inflation in decades even as the Fed has announced a historic increase in its benchmark lending rate last week.

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Georgieva said Trump-era tariffs should be lifted, which President Biden had said he was considering scrapping.

“Especially at a time when inflation is high and supply chains are tight…we can see clear benefits in rolling back the tariffs that have been introduced over the last 5 years,” Georgieva said.

Meanwhile, US stocks ended strong on Friday, with the Dow Jones Industrial Average jumping 2.7% to end at 31,500.68 and the Nasdaq Composite Index jumping 3.3% to 11,607.62. . The S&P rose 3.1% to 3,911.74.

(With agency contributions)

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Post expires at 9:40pm on Monday July 4th, 2022